Business / Commercial

Business / Commercial

A Franchisor's Responsibility For Franchisee's Compliance With Employment Laws

Created: Friday, 19 May 2017 15:13

Several well known franchise systems have recently made headlines in Australia in relation to Franchisees who have committed breaches of employment laws by underpaying staff and wage fraud. This has resulted in the Turnbull government introducing the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 ("Aussie Bill"). This Bill provides that Franchisors will be held liable for workplace violations by their Franchisees if they have significant influence or control over the Franchisee; if they knew or should have known of the underpayments; and if they failed to take reasonable steps to prevent the violations. For many commentators, while there is a recognition that some things need to change, this is seen as a step too far and some have even gone as far as to say that this would be the end of franchising in Australia as they know it.

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The Food Act 2014 - A New Regime For Food Businesses

Created: Tuesday, 09 May 2017 10:02

On 1 March 2016, the Food Act 2014 ("Act") came into force.  This put in place a new food safety and registration regime for businesses which are involved in food.  Gone is the one size fits all approach to food safety; the higher risk the business presents in relation to food the more obligations it will have and all businesses which have an involvement in food now have obligations under the new Act.

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Tips for Franchisors Selling Franchises

Created: Thursday, 23 March 2017 11:26

Selling franchises is not easy.  First you have to find the right franchisee, and when you do you need to make sure that all the right legal boxes are ticked to help ensure that there are no issues in the future.  Here are some tips to help you:

Ensure that they know exactly when payments are required to be made.  If you are a member of the Franchise Association of New Zealand Inc. and you require the franchisee to make a payment prior to the Franchise Agreement being signed then you must make the franchisee aware of (in writing) the purpose of the payment, the terms and conditions governing refund or application of the money and who will be holding the payment.

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A Landlord's Guide to Leasing to Franchise Tenants

Created: Friday, 18 November 2016 13:58

Franchising is serious business in New Zealand.  If you go to any mall in New Zealand you will find a number of the outlets are operated by franchise tenants.  In fact there are probably more than you think.

To some extent, leasing to a franchise tenant is no different to leasing to any other commercial tenant.  However, there are issues which a landlord should be aware of and take into consideration when leasing premises to franchisee.

Who is the tenant?

Often franchisors negotiate the terms of the lease but the tenant will be the franchisee.  Other times franchisors will negotiate and enter into the lease either themselves or via a special purpose company specially set up to hold the lease and then they will sublease or licence the premises to the franchisee.

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Topical Issues for Tenants When Negotiating Agreements to Lease

Created: Wednesday, 19 October 2016 12:00

Too often we are asked to review Agreements to Lease which have already been entered into by the parties.  Of course this is too late.  And it can be so disappointing because we can immediately see areas where we could have added value and even have saved our client money or reduced their risk.  Of course there is a cost to having a lawyer review an agreement to lease but this does need to be weighed up against the long term and serious financial implications involved.  A $100,000 per annum lease for a term of 10 years will be over a million dollar commitment not including the reinstatement obligations and the ongoing liability on assignment.

If you are a franchisor who is involved in the lease negotiation phase then you will appreciate the importance of making sure your lease negotiations are sound, as the terms of the lease can often be the difference between converting a franchise prospect into a franchisee or not.

We wanted to touch on a few areas in the lease negotiation phase which come up again and again and which have been highlighted by recent cases.

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Health and Safety at Work Act 2015

Created: Tuesday, 12 July 2016 20:58

By now all business owners and workers will have an awareness of the Health and Safety at Work Act 2015 which came into force on 4 April 2016.  We have produced a series of guides to assist business owners to understand their obligations and comply with the requirements of the Act.

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